With Indonesian Ban In Place, From Where Will Nickel Come?

In 2009, Indonesia banned the export of nickel ore. We’re only just starting to feel the repercussions.

Back in 2009, Indonesia passed legislation banning the export of various unprocessed minerals, including nickel ore (< 4 percent Ni content), copper concentrate and bauxite, in an attempt not only to increase the value of its exports of raw materials, but also to bolster industrial development in the country.

With the country’s fairly consistent track record of either shelving unpopular policies or reaching last-minute compromises, no one appeared overly concerned.

Indeed, until earlier this year, any moves to enforce the ban were notably absent. Then on Jan. 12, following the rejection by the Indonesian parliament of a compromise involving temporary export licenses, etc., wham, the gates slammed shut, and there is, now, a 100 percent ban on the export of nickel ore. That day was the day the world changed for nickel.

The Producing Countries

Mine production of nickel is, essentially, split into two types: sulfide ore and laterite. While production of the former has pretty much stagnated over the past several years, lateritic (laterite) nickel production has boomed. In 2013, according to research from Macquarie, world nickel ore production totaled some 2,374 kt, of which 855 kt were sulfides and 1,519 kt were laterites.

Major Nickel Ore Producing Countries

Sulfide Ore (36%)

Lateritic Nickel (64%)

Russia

Indonesia

Canada

Philippines

Australia

Australia

China

Cuba

South Africa

Colombia

Botswana

Brazil

New Caledonia

Of all nickel producers, Indonesia has seen some of the most significant growth in the last 10 years, with an incredible spurt in the last five. In 2013, Indonesia’s 775 kt of mined laterite accounted for one-third of global nickel ore production.

In terms of refined nickel globally, between 2009 and 2013, Indonesia’s share of production rose from 13.4 percent to 38.2 percent.